Buying a house is both exciting and scary, but as long as you know what you’re getting into, you won’t be met with any unpleasant surprises. While your realtor and mortgage broker should be more than happy to answer any questions you may have, sometimes it helps to know what questions to ask in the first place! Here are 4 things to consider when buying a house.
1. Location, location, location
There’s a reason real estate agents use this phrase often! The value of a home rests largely in the neighborhood, nearby amenities, and the school district it’s in. For example, an older, smaller home can be worth more simply because it’s close to a lively downtown shopping and dining area. The house might in fact be a fixer upper, but having nice parks in the neighborhood, low crime, and schools with excellent ratings really brings the value up. You may not have kids or care about schools, but the family you try to sell your property to in the future might steer clear of your street altogether if it’s not in a great district. Ultimately, you have to take into account the things you want in a home. Maybe having more acreage is more important to you than living downtown. Pay attention to the neighbors. Are there big dogs barking away next door? Are there kids playing? Do you see people walking or riding bikes? Are there streetlights and sidewalks? Base your decision on more than the house itself.
2. Future family needs
How long do you plan to be in this place? The features the home has now might work for where you are at this stage of your life, but would you be OK spending several years there if the market tanks and you can’t unload it? Is there room for an addition or a pool? The house should either have everything you can foresee yourself wanting in the next 10 years, or you should be able to add to or renovate the property as you wish.
3. Resale value
Taking the location and the property itself into consideration, think about whether you’ll be able to make a profit off this investment in the future. Real estate is fickle and there’s no telling exactly how much you’ll be able to sell for (if you’ll be able to sell at all), but if the home is going to require more money than it’s worth to begin with, it’s going to take longer to recoup it. Don’t be so blindingly in love with a house that you buy it for more than market value, or that you sink an unwise amount of money into improvements, especially cosmetic ones.
4. Hidden costs
You’ll have to come up with a down-payment to buy your home, ranging anywhere from 3 to 20%, but that’s not the only amount of money you’ll have to fork over. Expect to pay for home inspections and closing costs, as well. When calculating your monthly payment, remember to add yearly property taxes and homeowner’s insurance, too. Are you in a flood zone? That will mean you’ll need a separate flood insurance policy. You may also want something called a home warranty, so ask your realtor about that. Be prepared to pay for normal home maintenance, and expect possible changes to the utility bills you are used to paying (depending on if the home is larger or smaller, or in a cooler or warmer climate).
Hopefully our tips will help you in your home buying process, and congratulations on that new home!